What is the "official" interpretation of which payroll contributions must commence? Is it the first payment after the entry date, or the first payment for a pay period ended after the Entry Date? Consider three scenarios:

A) Payment on April 2 for the week ended March 26th.

B) Payment on April 9 for the week ended April 2nd.

C) Payment on April 16 for the week ended April 9th.

For which pay period must deferrals commence? If scenario B, would deferrals only be calculated for the service days after the entry date (i.e. April 1st & 2nd).

At face value, it is A, the first paydate occurring on or after the entry date.

From a practical standpoint it can be A, B, or C. It depends on the capabilities of the employer's HR systems to put the election in place.

I think the key is that if it is not A, the use of B or C just needs to be consistently applied. The last thing the employer wants is the appearence of being arbitrary. If that were the case, the door would be left open for a participant to hold the employer's feet to the fire and demand option A.

It seems simple, until my client tells me that the Payroll to be paid on April 2nd was already put through the system in late March, before the participant made an election. Same reason was given to me for Scenario B, in some instances due to timing.

The "CODA" reference wouldn't seem to "force" treatment A, it just wouldn't preclude any of the options.

Is there any specific guidance on this, or is it left to the Employer to be reasonable and CONSISTENT given its administrative systems and processes? For example, Employer indicates it will start deferrals on first full payroll after the Entry Date.

I seem to remember a certain Prototype in my past that specifically addressed this, but the current documents I'm reviewing do not.

How would this effect safe harbor elections? For instance, if the document is signed prior to 10/1 with proper notification, however, the plan cannot feasible be started until the second or third check date in October, will this effect the employers ability to offer a safe harbor plan in 2004?